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  • Category: Investments

    Are high dividend stocks safe to invest?

    Have a query about dividend stocks? Searching for financial advice online? Find advice from experts here.

    Sometimes, I come across companies whose dividend yield is more than 10 percent per year. These include some high dividend bluechip stocks also. As margins for most of the companies will be around 10 to 15 percent, is it possible for the companies to grow if they distribute all their profits as dividends? If the companies can't grow, will they be able to pay high dividends in the long run? Are highest paying dividend stocks safe to invest?
  • Answers

    5 Answers found.
  • If one is investing only for the sake of dividends, then one should invest in good companies which are consistently having a good history of high dividend pay outs and still have high profit potential.
    However, in this regard one should ensure that the dividend pay out, as return on investment is higher than the maximum interest rate of bank fixed deposits and good company deposits.

    Similarly one should also note that once the dividend is distributed, there is less chance for the market price to grow high in the normal circumstances. The ideal situation will be stocks paying good dividend and gradually and steadily growing in market price also.

  • The dividend is usually issued by the companies who are stable and have some stable record of the profit gains. And their policy of the dividend often goes to show if they are in good financial condition. Many such old companies offer dividend to the investors. So in theory there should be no issue with the investment from the high dividend stocks. Do note that some penny stock companies also offer the dividend and they want to have some investor money. So it is not going to be easy for many people to invest into such companies. So due research needs to be done if you are seriously investing into such companies. Known and record balanced companies should be chosen. Good dividend and also good market value, is a sign of good company. So investing into such may not affect you.

  • If you want to earn some good dividends then you must invest in some good stocks which are yielding good returns every year. But do a well research before you invest your hard earn money. there are so many sites available in internet, which provides you information about high dividends stocks. and remember one more thing that a company which is offering good dividends must have a high market value too, thus when you need to sell it you will get a good amount of money.

  • Investing in the good dividend company is doing a wise investment and should keep track of your portfolio of all the shares present in it. Choose good dividend yielding stocks for continuous dividend for your shares and also keep track of it daily or weekly or monthly once.
    Group A companies, Nifty 50, Nifty junior, etc... have good dividend yielding stocks. Its safe for
    the future if your portfolio also increases in value of the stock every month or year. Every cycle its different and always check for the latest and be updated through the BSE, NSE websites

  • No stock is risk-free for investment. No stock can assure capital protection. This is the fundamental truth behind equity investment. We have to take into consideration innumerable factors, ratios, micro-economic and macro- economic scenarios before investing in a stock.
    So far as high dividend yielding stocks are concerned, there is no surety that the companies would continue making profit year after year and continue paying dividends to the shareholders. However, generally speaking, it is expected that the high dividen-yielding stocks would provide a steady yearly income.

    Beware! I question everything and everybody.

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